What’s going to bring the current bear market in cryptos to a close? That’s the question on many minds, as cryptocurrencies at-large have yet to rebound following the May meltdown. Late last month, analysts at JPMorgan stated the near-term outlook remains “challenging.” That is, we could see further sell-offs ahead.
Yet, there may be something that puts this digital asset class back into high gear: pending upgrades. As you may know, Ethereum (CCC:ETH-USD) has its major 2.0 upgrades coming up. Cardano (CCC:ADA-USD) is another one with enhancements in the works. In its case, the integration of smart contracts.
It’s not only these DeFi (decentralized finance) optimized altcoins that have possibly game-changing upgrades on the horizon. Even the crypto that started it all, Bitcoin (CCC:BTC-USD), has big time improvements in the works. Its forthcoming upgrades may be what it takes for it to shake off the recent “Boomer coin” status it’s acquired in recent months.
It may be too early to say. But the upgrades for these established coins and altcoins, along with pending enhancements to several others, could bring a return to a bull market for cryptos in the months ahead. So, what are some of the major upgrades set to go live in the immediate future? These seven may (or may not) have an impact on the market’s overall direction:
- Cardano
- Bitcoin
- Dogecoin (CCC:DOGE-USD)
- Ethereum Classic (CCC:ETC-USD)
- Ethereum
- Neo (CCC:NEO-USD)
- Stellar Lumens (CCC:XLM-USD)
Cryptos: Cardano (ADA-USD)
As one of the top “Ethereum killers” (altcoins challenging Ethereum’s DeFi dominance), expectations run high for Cardano. Many dived into it during the crypto bubble last spring, anticipating it seeing a tremendous rise in value in the coming years.
Yet, its high utility and potential wasn’t enough to leave it unscathed after the big selloff in May. ADA-USD hit an all-time high of $2.46 on May 16. Since then? It’s fallen nearly 45%. Fair weather investors who bought it for fast profits have cashed out. But investors with a longer time horizon may not want to throw in the towel.
Why? Because its Alonzo and Goguen upgrades could be the catalyst that sends it back toward its past high-water mark. Especially the Goguen upgrade, which is the one that will add smart contract capabilities to this altcoin rising star. With its enhancements going live in the next month, the slump Cardano’s found itself in may give way to a solid rebound in its coin price.
Of course, it’s not guaranteed that ADA will rally from the $1.36 it trades for today, back up to $2.46. The above-mentioned challenges to the crypto market may mean its recovery will still take some time. But with it “leveling up” its utility, and making itself a more viable competitor to Ethereum, buying now may be one of the best moves you make in cryptos right now.
Bitcoin (BTC-USD)
Despite still being the most valuable crypto by market capitalization, much of the buzz around BTC-USD has tapered off lately. With slow transaction times, lower DeFi utility, and of course the conversation about its carbon footprint, this is no surprise.
Worse yet, it may be at risk of becoming the “AOL of crypto,” an argument made by a Bloomberg commentator a few months back. In other words, much like AOL was a first-mover that quickly became a dinosaur, so too could Bitcoin.
However, there is something big in the pipeline that could change all that: the Taproot upgrade. This upgrade (the first one for BTC since 2017) is set to come online in November. Taproot includes many improvements. The most important one? Enhanced smart contract capabilities. With this in mind, it may no longer be set in stone that Ethereum will supplant it as the dominant cryptocurrency.
Instead, Taproot may be what gives Bitcoin a shot of becoming an Ethereum killer itself, grabbing a much larger share of the DeFi and decentralized application (dApp) space than it has now. And, in turn, what gets BTC-USD out of its slump, and back toward prior price levels. Trading for between $34,000 and $35,000 recently, now may be the time to buy, ahead of the improvements.
Cryptos: Dogecoin (DOGE-USD)
Is Dogecoin about to get serious? It’s starting to look that way. It’s still questionable whether Elon Musk would follow through on his plans to help improve the utility of this meme coin. Even as his tweets on it have moved beyond just jokey takes, and now discuss the nitty-gritty of leveling it up.
Right now, it’s the efforts of developer Patrick Lodder that may be of most interest to those holding DOGE-USD. Namely, upgrades that will lower transaction fees and increase its scalability. Admittedly, these changes won’t immediately turn it into a possible Ethereum killer. It still has its work cut out for it.
Musk’s involvement in its improvement remains a work-in-progress. But if he remains its main cheerleader (despite his tweets not moving its price as much as they once did), progress in its development could continue. If it all works out, and it fully moves beyond its “jokecoin” origins, it may give it a path to rebound, after its epic fall from nearly 74 cents, to around 22 cents today.
Yet, unlike with Cardano, Ethereum (more below), and the other cryptos with upgrades coming up fast, a Dogecoin recovery could take much more time. Keep it on your radar, but it may still be best to take your time before entering a position.
Ethereum Classic (ETC-USD)
ETC may have its fans. But it’s far behind in terms of usage (or market capitalization) compared to its better known counterpart, ETH, which forked off of it. ETH, or Ether (what the coin that powers Ethereum is called) may also be receiving more attention with regards to its aforementioned upgrades.
Yet, not to be left behind, Ethereum Classic, the “original,” has a major upgrade as well, that’s going live later this month. Known as the Magneto upgrades, this upgrade mainly implements the enhancements Ethereum implemented earlier this year, with its respective Berlin upgrade. Mostly, these improvements will bolster up security, as well as lower transaction fees.
Awareness of the pending upgrades may have helped ETC prices to rally in late June. Should investors expect a similar reaction, once they go live on July 21? Not so fast. The widespread improvements seen with Bitcoin, Cardano, Ethereum, and others may be what heralds a return to a bull market for cryptos.
But don’t give your hopes up thinking that the Magneto upgrades will send Ethereum Classic (recently trading for around $49.50) back to the triple-digit price levels it traded for back in May. There may be potential for it to gain. Yet, as I put it on June 17, with so many fish in the DeFi sea, throw this one back.
Cryptos: Ethereum (ETH-USD)
Will the upcoming improvements to Ethereum help move the price of its coin? Or, will it fail to move the needle? The 2.0 upgrades include many major changes.
For one, the move to proof-of-stakes, which will help speed up transaction times. In addition, it will bring down the high “gas fees” that have resulted in many turning to the Ethereum killers as alternatives. But some crypto market commentators are skeptical whether the changes will bring about increased usage, and in turn, an increase in price for Ether (what the coin itself is called).
On the other hand, it seems far-fetched to think these changes won’t help this blockchain, the most predominantly used in DeFi, maintain its lead over Cardano, Polygon (CCC:MATIC-USD), and other Ethereum killer front-runners. Not only that, allow it to make big progress in getting towards the so-called flippening, or the point in which it becomes more valuable than Bitcoin.
As InvestorPlace’s William White reported July 9, analysts at Goldman Sachs already see it as the crypto with superior real-world use. Once the 2.0 upgrades go into effect, we could see the sentiment around it continue to move in this more positive direction. That may not mean the flippening is within reach. Yet, it may mean Ether prices, at around $2,100 today, may have room to leap back above $3,000, or even above $4,000 per coin.
Neo (NEO-USD)
NEO-USD may be one of the more obscure cryptos. But as InvestorPlace’s Tezcan Gecgil broke it down Jun 23, it may be good value at today’s prices (around $34). Why? For now, due to many existing features, including smart contract capabilities.
Yet, once it finishes up implementing its N3 upgrade? Take a look at its website, and you’ll see how, once complete, its suite of features could help Neo give the current incumbents a run for their money.
These features include one block finality, a built-in oracle and interoperability with other major blockchains via parachains. Sure, these features alone don’t guarantee this more under-the-radar will quickly climb up the CoinMarketCap rankings. However, given its small size (market capitalization of around $2.4 billion), it may have ample runway to deliver strong returns from here.
Either from its N3 upgrade helping to drive a big movement of dApp developers to its network. Or, from overall enthusiasm returning to the crypto market, sending prices across-the-board back in the right direction. Of course, it’s small size could mean high volatility (in a bad way), if the crypto market remains challenged. But if positioned accordingly, consider NEO another name to add to the list of long-shot cryptocurrencies that could soon catch on.
Cryptos: Stellar Lumens (XLM-USD)
Stellar Lumens is another well-known crypto that has a major upgrade in the works. Specifically, this upgrade will enable automated market maker, or AMM, functionality. This could help enhance its ecosystem in a big way.
That being said, you may not want to count on this leading to a big rise in price for its native token, XLM-USD. Previously, I’ve been critical about its bull case. Not for the technology behind it’s network though. Based on the details, it’s clear the Stellar network stands to disrupt the old school international funds remittance business model. The traditional method of remitting funds overseas takes time, and is costly.
In contrast, this blockchain alternative can complete transactions in a blink of an eye. And fees are a pittance compared to the 7% to 15% it costs now sending money to other countries the old-fashioned way. Yet, even this high utility may mean a higher price for XLM-USD. Mainly, since you can use stablecoins, not just its native token, as a medium of exchange on the network.
Again, like with other cryptos, an overall rebound in the market may help give its price a boost. The upgrades to the Stellar network by themselves? It’s possible, yet it may not be something to bank on, as XLM continues to trend lower.
On the date of publication, Thomas Niel held long positions in Bitcoin and Ethereum. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
